This is a list of some of the highest yielding dividend stocks out there. But just because they have high yields does not mean you should automatically invest in them. These are all stocks that have higher than average dividend yields.
The first is the top 5 highest dividend stocks. They come with a bit more risk than most stocks for various reasons. Then, there is a list of high dividend stocks with names that you will recognize which will make it a little easier for you to wrap your mind around.
Top 5 Highest Dividend Yield Stocks
Transportadora de Gas del Sur SA (TGS) – Dividend Yield: 52.16% – Super high yield, but it comes with risk
Torch Energy Royalty Trust (TRU) – 29.69% – High yield, but negative growth
Partner Communications Company Ltd (PTNR) – 22.78% – High yield, and POSITIVE growth
BBVA Banco Frances S.A. (BFR) – 18.64% – High yield, but it’s a financial stocks…and it’s a financial stock in Europe. That’s two strikes in my book.
Resource Capital Corp (RSO) – 17.33% – High yield, but again, it’s a financial stock, one that is involved in real estate and it is a small cap stock. Those are three strikes for me when it comes to dividend stocks.
High Dividend Stocks
CenturyLink, Inc. (CTL) – Dividend Yield: 7.43% - Income with growth potential
AT&T Inc (T) – 5.64% - good value, growing market, but not without its challenges
Verizon Communications Inc (VZ) – 5.12% - Possibly a better value, but growth concerns
GlaxoSmithKline plc (GSK) – 5.05% - Good value and in healthcare, a growing market
Eli Lilly & Co. (LLY) – 4.95% - Another major drug company with potentially great value
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Why Dividend Yielding Companies are Good Stocks to Invest in
There are a lot of reasons it might be good to invest in dividend stocks. It’s not for everyone, but it may be for more people than you may think.
The traditional view holds that those who are looking for stability and need a fixed income should invest in stocks that offer a dividend. These would be people who need a more conservative investment strategy, like those who are retired or nearing retirement age. These are people who need a steady return but do not want to touch their capital.
The thing is that even people looking for capital appreciation might find some good opportunities in dividend stocks. There is research showing that companies with rising dividends over time also appreciate in value as well. That is because companies that increase dividends are confident in their future and in their financial situation.
You can employ a strategy of reinvesting the dividends back into buying more of the stock.
Tax Implications for Dividend Stocks
You should have a tax accountant to help you with the details of tax planning with your investments. But you should know that dividends are generally taxed as income, not capital gains. This is important because capital gains taxes are lower than income tax. This is an important factor to consider when deciding if dividend yielding companies are good stocks to invest in for you and your particular financial situation.
Remember that investing is a very risky activity. You can lose all or most of your initial investments. Consult a licensed financial advisor before implementing any investment strategy. Historical performance is no guarantee of future performance. No one can accurately predict the future, at least not consistently over time. The writer of this article and owner of this website do not own any of the stocks mentioned in this post.